Shifting the PQ Perspective

We all agree that today's digital world needs better power quality. At the present time, however, there's one factor that poses a major challenge to achieving this goal â€” the restructuring of the electric power industry. In the past, bundled tariff rates have given utilities the latitude to attend to individual customer needs.

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We all agree that today's digital world needs better power quality. At the present time, however, there's one factor that poses a major challenge to achieving this goal — the restructuring of the electric power industry. In the past, bundled tariff rates have given utilities the latitude to attend to individual customer needs. But in the deregulated world, commodity-based revenue won't be available to help justify premium utility service, and it's unrealistic to expect local distribution companies (LDCs) to cover the costs. Utility companies will naturally fall back to the cost-of-service mantra that promotes nondiscriminatory distribution services to all customers. But if utilities increasingly view themselves as asset managers, why should they provide redundant facilities or high-reliability service beyond what is mandated?

As for regulated utilities, they have little hope of recovering premium investments in future rate cases, and they can't always recoup their costs without a customer contribution or long-term contract.

There are, of course, other measures intended to maintain power reliability, including performance-based rates and public utility commission (PUC) standards. In California, the PUC required utilities to measure the frequency and duration of outages and report back annually. Such standards support reliability efforts, but they fall short of addressing high reliability expectations. For example, the “Texas Tariff for Retail Delivery Service” states that a “Company will use reasonable diligence to provide continuous and adequate delivery for electric power and energy…but it does not guarantee against irregularities or interruptions.” If PUCs haven't held utilities accountable for acts of God or other unavoidable events in the past, they won't require them to provide specific reliability measures for individual customers in the future. In fact, they discourage such practices because of the nondiscrimination position.

All of this begs the question: What entities will — and should — provide premium power quality service? Utilities will provide some level of premium service, but company officials will want to charge for it. Obviously, the best scenario would involve customers making informed decisions after considering utility and onsite solutions. The problem with this scenario is customer education.

Up to this point, the belief that utilities are responsible for power quality remains entrenched in the minds of customers. And why not? For decades, electric utilities used Ready Kilowatt to assure customers that reliable power was always available. In recent years, utilities have tried to differentiate themselves from would-be competitors by launching loyalty campaigns that included service promises and guarantees. The utility slogan where I recently worked is “Obsessively, relentlessly, at your service.” Besides the heralded service claims, utilities typically haven't charged for premium power services, leading customers to believe that these services are free.

Clearly, the utility industry has done an inadequate job of informing and educating customers on the aspects of power quality service. This observation was echoed in last month's issue of Power Quality. In the Applications Corner column, “What Customers Think About Power Quality,” contributing author Doug Dorr described customers' overall perceptions: “Customers feel that power quality is the responsibility of power companies and electricity is a product that should be delivered free of imperfections.” Now is the time to up the learning curve and develop realistic customer expectations.

Utility personnel can begin by informing their customers that utility service has performance limitations. Yes, utilities can solve many power quality concerns, but customers should look to retail providers to support reliability needs beyond the utility's standard offering. This may include a premium power quality service offered by a utility or it's subsidiary, but it should include looking at other solution providers as well. It won't be easy transforming customers' thinking. Utilities will need to educate consumers by explaining that high-quality utility power is not a given and if you want something beyond standard service, you'll have to pay for it. Utility power quality service will increase only when we offer utilities incentives and change customers' perceptions.

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